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It’s summer now, so most individuals are considering about attending barbecues and buying fireworks — not planning for the holiday shopping season. But if you run a brick-and-mortar store or e-commerce business, now is the perfect time to start considering about your holiday merchandise.
Successful planning in June and July will make sure you are profitable in November, December, and January. Here are six ways to successfully plan for increased inventory demand during the holiday season.
1. Create a timeline
The holiday season is the most profitable sales period for most retailers. According to the National Retail Federation (NRF), holiday sales exceeded $964 billion in 2023, which implies an increase of three.8% compared to the previous yr.
So start by establishing a timeline of key dates when you possibly can expect sales and demand to increase. These dates almost certainly include:
Think about the final shipping dates for each of those holidays and add them to your calendar. This way, you possibly can inform customers about the last days they will receive standard and expedited shipping on their orders.
2. Determine what you will have
Then you forecast the types and amounts of inventory you’ll need for the holiday season. Having enough inventory to meet customer demand will make sure you don’t lose business to your competitors. It can even enable you avoid overstocking items you don’t need.
The best way to estimate holiday demand is to look at previous sales data and concentrate to customer buying patterns. Of course, buying habits can change barely from yr to yr, so it is also value looking at industry trends. For example, you possibly can see what your competitors are doing and how they are preparing for the holidays. And if you have Membership in the NRFreceive information on consumer and retail trends.
Once you have done the proper research, you possibly can start planning your holiday inventory. You can even start considering about when it’s best to start marketing and how many employees you will have to cope with the increased demand.
3. Conduct an inventory audit
An inventory audit involves frequently checking the accuracy of your inventory. During an inventory audit, you’ll confirm that your physical inventory matches what you have recorded in your financial records. An inventory audit can even enable you uncover inefficiencies in your supply chain.
To conduct an inventory audit, start by organizing your inventory to reduce the likelihood of miscounting items. Then, you will physically count and record each item in your inventory management software.
Once the audit is complete, you’ll reconcile the number with the inventory records. If there are any discrepancies, you possibly can investigate where they got here from. You can even start developing a plan to reduce the discrepancies in the future.
4. Contact your suppliers
Once you know how much inventory you wish to meet holiday demand, it’s best to start contacting your suppliers. Contacting your suppliers early will be sure that you are on the same page and not be surprised by changes in their order times or prices.
It’s also a good idea to ask if any of your suppliers offer pre-order discounts or promotional pricing. It never hurts to ask, and some could also be willing to offer you a discount for large orders.
5. Think about financing
When you begin planning your holiday inventory, one of the biggest concerns is the way you’re going to pay for all of it. Many small businesses don’t have the money flow to pay for a large inventory order, material deliveries, and the unexpected costs that come with it.
If you are in this case, financing could also be a good solution. Inventory financing is a one-time loan or a standing line of credit that you would be able to use to purchase inventory for what you are promoting. The purchased inventory is used as collateral for the loan.
Financing can enable you maintain a regular money flow during seasonal fluctuations in what you are promoting. It can even offer you the flexibility to respond to increased customer demand. If you are interested in exploring your financing options, it’s best to start now to be well-prepared come fall.
6. Place your order in advance
Many shoppers start their holiday shopping in September and October due to concerns about product shortages and long shipping times. So you wish to place your inventory orders as soon as possible to attract those early shoppers.
However, there’s no way to predict exactly how much inventory you’ll need, and you’ll definitely run out of things anyway. That’s why you wish to have a plan to quickly replenish missing items. For example, a good inventory management system will notify you when you’re out of things and need to reorder them.